Evolving Supply Chain Patterns · High-Cube Parcel Hub Warehouse (ITE #156) High-Cube Cold Storage Warehouse (ITE #157) COPYRIGHT 2017 LIBERTY PROPERTY TRUST. CONFIDENTIAL MATERIAL

COPYRIGHT 2017 LIBERTY PROPERTY TRUST. CONFIDENTIAL MATERIAL. 1

Evolving Supply Chain PatternsDecember 2017

COPYRIGHT 2017 LIBERTY PROPERTY TRUST. CONFIDENTIAL MATERIAL.

Good Morning

2


Founded in 1990 (NYSE: LPT)

US Industrial Portfolio: 100 Million SF

100+ eCommerce tenants

About Liberty Property Trust

Liberty Property Trust:

3


70 Tenants in 50 industrial buildings

27 million square feet

15 eCommerce tenants

6,000+- Jobs

About Liberty Property Trust

Pennsylvania Portfolio:

4


Michael AldermanLiberty Property TrustVice President, Market Officer

[email protected]

5

Manufacturers & Supply Chain Professionals

ConsultantsOfficials

mailto:[email protected]



What is a Supply Chain?



A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, through to its eventual delivery to the end user.



9

$ Billions



10

$ Billions



11

$ Billions



It’s a Noun



It’s a Verb



It’s an Equation



Distribution or Logistics



Fulfillment


Supply Chain Evolution

*(From a dumb real estate guy’s perspective.)


Typical Industrial: 1985150,000sf 24’ Clear Height 1 Dock/10,000sf Sparse Parking



Typical Industrial: Today600,000sf+ 36’ Clear Height 1 Dock/5,000sf Dense Parking



Why?



Why?


“ Five Game-Changers ”



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems

(1986 – 1992)



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems

(1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER BUILDINGS

2. Big Box Retailers (1990 – 2005)



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS

2. Big Box Retailers (1990 – 2005)



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS

2. Big Box Retailers (1990 – 2005) = BIGGER INDUSTRIAL BUILDINGS



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS2. Big Box Retailers (1990 – 2005) = BIGGER INDUSTRIAL BUILDINGS

3. China Enters the WTO (2001)












3. China Enters the WTO (2001)= BIGGER INDUSTRIAL BUILDINGS



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS2. Big Box Retailers (1990 – 2005) = BIGGER INDUSTRIAL BUILDINGS3. China Enters the WTO (2001) = BIGGER INDUSTRIAL BUILDINGS

4. eCommerce (2000 - )




4. eCommerce Growth (2000 ) …. 1.0




4. eCommerce Growth (2010 ) …. 2.0



“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS2. Big Box Retailers (1990 – 2005) = BIGGER INDUSTRIAL BUILDINGS3. China Enters the WTO (2001) = BIGGER INDUSTRIAL BUILDINGS4. eCommerce Growth (2000-2010) = BIGGER INDUSTRIAL BUILDINGS

A perfect fit of Supply Chains designed on the assumptions of 3-day delivery by Regional Truckload and Less-Than-Truckload Volumes & Networks !


ITE #’s (9th)

Raw Materials ….. Staging for Manufacturing 150

Assembly / Light-Manufacturing 150, 152

Finished Goods Inventory …. Buffer Inventory & Sales 152

Consolidation Point …. Fulfillment, Omni-Channel, Mixing 150

Import Center 152

Typical Functions Performed by Light Industrial Facilities (1985 – 2010):




5. eCommerce Saturation (2010- )




5. eCommerce Saturation (2010- )




5. eCommerce Saturation (2010- ) = BIGGER & SMALLER INDUSTRIAL BUILDINGS



39


“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS2. Big Box Retailers (1990 – 2005) = BIGGER INDUSTRIAL BUILDINGS3. China Enters the WTO (2001) = BIGGER INDUSTRIAL BUILDINGS4. eCommerce Growth (2000-2010) = BIGGER INDUSTRIAL BUILDINGS5. eCommerce Saturation (2010- ) = BIGGER & SMALLER INDUSTRIAL BUILDINGS



Looking for the “Secret Sauce”

41

How to profitably deliver into urban areas?


Looking for the “Secret Sauce”

42

How to profitably deliver into urban areas?



43


“ Five Game-Changers ”1. ESFR Sprinklers + Warehouse Management Systems (1986 – 1992) = BIGGER INDUSTRIAL BUILDINGS2. Big Box Retailers (1990 – 2005) = BIGGER INDUSTRIAL BUILDINGS3. China Enters the WTO (2001) = BIGGER INDUSTRIAL BUILDINGS4. eCommerce Growth (2000-2010) = BIGGER INDUSTRIAL BUILDINGS5. eCommerce Saturation (2010- ) = BIGGER & SMALLER INDUSTRIAL BUILDINGS

A mix of functioning Supply Chain operations and parcel-delivery experimentation by participants unwilling to collaborate !



A mix of functioning Supply Chain operations and parcel-delivery experimentation by participants unwilling to collaborate !





Land Use

9th EditionTrip Generation

Manual

Warehouse (ITE #150)

High-Cube Warehouse/Distribution Center (ITE #152)


Manual

Warehouse (ITE #150)High-Cube Transload and Short-Term Storage

Warehouse (ITE #154)High-Cube Fulfillment Center Warehouse (ITE #155)

High-Cube Parcel Hub Warehouse (ITE #156)High-Cube Cold Storage Warehouse (ITE #157)



Land Use


Manual

Warehouse (ITE #150)TL & LTLTruckingHigh-Cube Warehouse/Distribution Center (ITE #152)


Manual

Warehouse (ITE #150)

TL, LTL & Parcel Trucking

High-Cube Transload and Short-Term Storage Warehouse (ITE #154)

High-Cube Fulfillment Center Warehouse (ITE #155)High-Cube Parcel Hub Warehouse (ITE #156)

High-Cube Cold Storage Warehouse (ITE #157)


Evolving Expectations = Faster80% of Product OfferingsMulti-Channel / Omni-ChannelNew LocationsNew Building TypesNew Freight Movements


eCommerce Facility Form FactorsEvolved:

Sortable800,000sf 1000 – 2000 employees30-100 trucks per day

Non-Sortable500,000sf+ 150 – 300 employees10 – 50 trucks per day

Local hubs100,000 – 300,000sf100-300 employees100+ trucks per day


eCommerce Facility Form FactorsEvolving

Fresh Food Fulfillment Centers 150,000sf +-Subscriber Pick-up Hubs 50,000sf +-Import Centers 500,000sf +-Air Cargo facilities


Thank you.

Documents

Evolving Supply Chain Patterns · High-Cube Parcel Hub Warehouse (ITE #156) High-Cube Cold Storage Warehouse (ITE #157) COPYRIGHT 2017 LIBERTY PROPERTY TRUST. CONFIDENTIAL MATERIAL